ISLAMABAD: Pakistan State Oil (PSO) has won an arbitration case against global Liquefied Natural Gas (LNG) trader Gunvor Group Limited for receiving excess payments for natural gas shipments. London Court of International Arbitration (LCIA) gave verdict in favour of PSO which had reduced payments to Gunvor due to overcharged shipments.

PSO was awarded $ 14.6 million as well as other costs as per contract on October 8, 2022, for case initiated by Gunvor in January 2021. According to details, PSO continued making excess payments to Gunvor on account of port charges for four and half years. 

Later, it was pointed out by Pakistan LNG Limited management that Gunvor was receiving excess payments from state-owned oil company. Subsequently, a legal opinion was sought from an international firm that had assisted Pakistani firms in finalising LNG supplies agreement with Gunvor. Promptly after availability of final port charges, PLL notified Gunvor on November 9, 2018, of its concerns regarding calculations applied by international commodity trading company in provisional invoices.

PLL had reached out to Gunvor again on August 10, 2020, intending to resolve issue. After PLL management had identified excess payments received by Gunvor, PSO deducted excess amount. Consequently, Gunvor filed a case against PSO in an international court. PSO had supply contract for five years with Gunvor that expired in December 2020.

PLL has also a five-year agreement with Gunvor for LNG supply that expired in December 2021. PSO officials didn’t immediately respond to request for comment on case.

Published in The Daily National Courier, October, 14 2022

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